Skin microbiome: two companies, two approaches
Exploring the different paths to market for microbiome products.
At the Tricon Microbiome Symposium in San Francisco two weeks ago, there were remarkable panels and presentations from across the microbiome field (Stanford’s Sonnenburg Lab, Second Genome, Seres Therapeutics, etc.), however, there were two presentations that really stood out to me: Naked Biome and AOBiome. Both are skin microbiome companies based in San Francisco yet they have divergent paths to bringing their products to market. One a therapeutics route and one a consumer over-the-counter (OTC) route. Here we will explore a bit about each company and the two paths.
Let’s start by looking at AOBiome. According to the company’s presentation, it all started when founder David Whitlock was on a date and his partner inquired about why horses roll in the dirt. One thing led to another and David analyzed the soil microbiome to find ammonia oxidizing bacteria which produce nitric oxide and nitrite which may promote skin health. Romantic right? Anyway, during the course of their research, the NYTimes did a piece on their no-soap, no-shampoo experiment, and reported the findings. The article went viral and people started to demand a product.
Naked Biome is researching acne treatments by exploring probiotic therapies based on the human skin microbiome (studying P. acnes to treat skin inflammation and outbreaks). Emma Taylor is an LA based dermatologist and I presume came up with the concept during the course of her work. Clearly a massive market opportunity if you can nail acne prevention and treatment.
Therapeutics vs OTC Consumer
Both started with the research and both have pursued clinical trials. However, AOBiome has immediately productized their probiotic into a spray - Mother Dirt - while Naked Biome has chosen the therapeutics path. Let’s dive into some pros and cons for each path:
- Medical professional buy-in: medical professionals clearly understand the therapeutics pathway. They respond well to in-depth clinical trials data.
- Pharma margins: The margins in the pharmaceutical industry is around 70-80%. Effectively, if you become the new standard of care then you can print money.
- IP protectability: It’s not entirely clear to me how Naked Biome (or any probiotic company) will maintain protection from the patent office. If their product is a bug-as-drug (i.e., using a probiotic as opposed to a small molecule), then there doesn’t seem to be much patentable. However if they are pursuing the small molecule therapy track for their product then they can have more defendable protection. (note: this applies to the OTC Consumer path as well.)
- Time and money: It take a long time to run trials and it is very expensive. Plus there’s the obvious uncertainty of science (i.e., “what if it doesn’t work?”). Seres had to deal with this recently.
- Immediate commercialization: the company can get a product out on the market immediately which helps re-inforce their clinical trials through anecdotal consumer insights. This path is an ode to solutions science.
- Clinical trial threshold: there is a lower threshold to get the product to market. In fact, if in the supplements space, there is no need to conduct clinical trials.
- Skepticism: Rightfully, consumers and the medical community will meet these products with a higher level of skepticism.
- Marketing: It’s not always in the core skillset of a research company to build a consumer brand. Making a successful consumer brand is immensely difficult and typically takes a lot of capital to build an audience.
- Margins: Consumer product good’s have much lower margins than pharma.
In summary, both paths are acceptable and legitimate. However, microbiome companies should understand what the divergent paths entail. Overall, I’m just excited for more evidence based solutions to microbiome related consumer issues.